ptc annual report 2011 12

8/12/2019 PTC Annual Report 2011 12

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P T C I N D I A L I M I T E D


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Vision

To be a frontrunner in power trading by developing a

vibrant power market and striving

to correct market distortions

Mission

Promote Power Trading to optimallyutilize the existing resources.

Develop power market for market basedinvestments into the Indian Power Sector.

Facilitate development of power projects

particularly through private investment.

Promote exchange of power withneighbouring countries.

Values

Transparency

The Customer is always right

Encouraging Individual initiative

Continuous Learning

Teamwork

THIRTEENTH ANNUAL GENERAL MEETINGTo be held on Friday the 21st September, 2012 at 04:30 P.M. at FICCI, 1

Foundation House, Tansen Marg, New Delhi 110001

NOTE:S1. hareholders are requested to bring their copy of AnnualReport with them to the Annual General Meeting .

No gifts or coupons would be given to the shareholders2.for attending the Annual General Meeting.


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CONTENTS

Page No.

Board of Directors 4

Notice 5

Directors Report & Certificates 10

Audited Financial Statement 28

Consolidated Financial Statement 47


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BOARD OF DIRECTORS

Shri T.N. Thakur, Chairman & Managing Director, PTC1.

Shri Deepak Amitabh, Director, PTC2.

Smt. Rita Acharya, Joint Secretary, MOP3.

Shri A.B.L. Srivastava, Director, NHPC4.

Shri I.J. Kapoor, Director, NTPC5.

Shri M.K. Goel, Director, PFC6.

Shri Ravi P. Singh, Director, PowerGrid7.

Shri S. Balachandran, Director, PTC8.

Shri Hemant Bhargava, Director, PTC9.

Shri Ved Jain, Director, PTC10.

Shri Dipak Chatterjee, Director, PTC11.

Shri Anil Razdan, Director, PTC12.

Shri H. L. Bajaj, Director, PTC13.

Shri D. Swarup, Director, PTC14.

Company Secretary

Shri Rajiv Maheshwari

Statutory Auditors

M/s. T.R. Chadha & Co.

Internal Auditors

M/s. Ravi Rajan & Co.

Registrar and Share Transfer Agents

M/s. MCS Limited

F65, Okhla Industrial Area, PhaseI

New Delhi 110 020

Phone: 41406149; Fax: 41709881

Principal BankersIDBI Bank Ltd.

Indian Overseas Bank

State Bank of Travancore

ICICI Bank

Indian Bank

Indusind Bank

Corporation Bank

Yes Bank

M/s. K.G. Somani & Company


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Director only up to the date of ensuing Annual General Meeting), in

respect of whom the Company has received a notice in writing from

a Member proposing his candidature for the office of Director under

Section 257 of the Companies Act, 1956.

To consider and if thought fit, to pass with or without modification(s),

the following resolution for appointment Shri H.L. Bajaj as Director as

ordinary Resolution:

Resolved that pursuant to Section 257 of the Companies Act, 1956,

Shri H.L. Bajajbe and is hereby appointed as a Director of the Company

and shall be liable to retire by rotation.

Further resolved that any Director or Company Secretary of the

Company be and is hereby authorized to do all such acts including

filing of necessary intimation with ROC for above purpose.

By Order of the Board of Directors,

For PTC INDIA LTD.

Place: New Delhi (Rajiv Maheshwari)

Date:16th August, 2012 Company Secretary

Notes:

1. A Member entitled to attend and vote at the annual general meeting (the

meeting) is entitled to appoint a proxy to attend and vote on a poll

instead of himself and a proxy need not be a member of the Company.

A proxy form is enclosed. The instrument appointing a proxy should,

however, be deposited at the registered office of the Company not less

than 48 hours before the commencement of the meeting.

2. The relevant explanatory statement pursuant to Section 173 of the

Companies Act, 1956 in respect of Special Business set out in the notice

is enclosed.

3. Brief resume of Directors seeking appointment and reappointment as

prescribed under clause 49 of the Listing Agreement is annexed hereto

and forms part of the notice.

4. Corporate members intending to send their authorized representatives

to attend the meeting are requested to send the Company a certified

copy of Board Resolutions authorizing their representative to attend

and vote on their behalf at the meeting.

5. Relevant documents referred to in the notice or in the accompanying

explanatory statement are open for inspection at the registered office of

the Company on all working days, except Saturdays, between 11:00 a.m

and 1:00 p.m. up to the date of Annual General Meeting.

6. The details pertaining to the appointment / reappointment of Directors

are furnished in statement of Corporate Governance in the Directors

Report/ in the Explanatory Statement in the notice.

7. The Company has notified closure of Register of Members and Share

Transfer Books from Friday, 14th September, 2012 to Friday, 21st

September, 2012 (both days inclusive) for determining the names

of members eligible for dividend on Equity Shares, if declared at the

Meeting. The dividend in respect of equity shares held in electronic

form will be paid on the basis of beneficial ownership existing as on

closing hours of 13th September, 2012 and as per details available from

NSDL and CDSL.

8. Members/ proxies should bring their copy of the Annual Report for

reference at the meeting as also the attendance slip duly filled in for

attending the meeting.

9. Members are informed that in case of joint holders attending the

meeting, only such joint holder who is higher in the order of names will

be entitled to vote.

10. Shareholders holding the shares in physical form and desirous of

making nominations, as provided by Section 109A of Companies Act

1956, are requested to send their requests in Form No. 2B in duplicate

(which will be made available on request).

11. In respect of shareholders holding shares in electronic form, members

are requested to notify any change of address and change in bank

details to their Depositories Participants.

12. The communication address of our Registrar and Share Transfer Agent

(RTA) is MCS Limited, F-65, Okhla Industrial AreaPhase-I, New Delhi-

110020.

13. Annual Listing fee for the year 2012-2013 has been paid to Stock

Exchanges where the Equity Shares of Company are listed.

14. Members are requested to notify immediately any change of address :

i) to their DP in respect of Shares held in dematerialized from

ii) to RTA i.e. M/s MCS Ltd. in respect of their physical shares, if any,

quoting their folio number.

15. For Electronic Clearing System facility for crediting dividend directly to

your designated bank accounts, shareholders are requested to give their

mandate in the form enclosed.

16. The entire Annual Report is also available at the Companys Website

www.ptcindia.com.

17. The Company is not providing Video Conferencing facility for this

meeting.

18. Members who wish to claim Dividends, which remain unpaid, are

requested to correspond with our Registrar and Share Transfer Agent

(RTA) i.e. M/s MCS Ltd. Members are requested to note that dividend

not en-cashed / claimed within seven years and 30 days from date of

declaration of dividend, will, as per Section 205A(5) read with Section

205C of the Companies Act, 1956, be transferred to Investor Education

Protection Fund of Government of India. In view of this, members

are requested to send all un-cashed dividend warrants pertaining to

respective years to Company/ RTA for revalidation and en-cash them

before due date.

19. As per circular no.18/2011 on Green initiative, the Company will send

Annual Report along with other documents through email to all members,

who have registered their email address with the depository and physical

hard copies will be dispatched to others. In case any member desire to

get hard copy of Annual Report, they can write to Company at registered

office address or email at [email protected] OR [email protected].

Important Communication to Members

The Ministry of Corporate Affairs (MCA),Government of India, has taken a Green Initiative in the Corporate Governance by allowing paperless compliance

by the Companies and has issued circulars stating that service of notice/ Documents including annual report can be sent by email to its members. To

support this green initiative of the Government in full measure, members who have not registered their email addresses, so far, are requested to register

their email addresses, in respect of electronic holdings with the Depository through their respective Depository Participants. Members who hold shares in

physical form are requested to provide details of their email addresses to Registrar and Transfer Agent of the Company at [email protected].


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To: All Shareholders, Directors and Auditors

Annexure to the Notice

EXPLANATORY STATEMENT PURSUANT TO SECTION 173 OF THECOMPANIES ACT, 1956

Item no. 3

Shri M.K. GoelShri M.K. Goel, aged about 56 years holds a Degree in B.E.(Technology).He is a nominee Director of PFC Limited, which is a Promoter Companyof PTC. He was originally appointed as additional director on the Board ofCompany w.e.f.08-08-2008 and confirmed in 10th AGM in 2009 as rotationalDirector; is retiring at the ensuing Annual General Meeting and eligible forre-appointment.

The above appointment of Shri M.K. Goel, as Director being liable to retireby rotation in terms of Section 255 of the Companies Act, 1956 requiresapproval of the Members in the General Meeting. Brief resume of Shri M.K.Goel is annexed.

Shri M.K. Goel does not have any shareholding in the Company.

None of the Directors except Shri M. K. Goel is interested or concerned inthe resolution of his appointment. The Board recommends the resolution foryour approval.

Item no. 4Shri S. Balachandran

Shri S. Balachandran, aged around 66 years holds a Degree in Master inScience( M.Sc.). He was originally appointed as additional director on theBoard of Company w.e.f.01-01-2009 and confirmed in 10th AGM in 2009 asrotational Director; is retiring at the ensuing Annual General Meeting andeligible for re-appointment.

The above appointment of Shri S. Balachandran, as Director requiresapproval of the Members in the General Meeting. Brief resume of Shri S.Balachandran is annexed.

Shri S. Balachandran does not have any shareholding in the Company.

None of the Directors except Shri S. Balachandran is interested or concernedin the resolution of his appointment. The Board recommends the resolutionfor your approval.

Item no. 6, 7 ,8, 9 and 10

Smt. Rita Acharya

Smt.Rita Acharya, aged around 57 years, holds a Master Degree in SocialWork and Diploma in Development Administration is a Joint Secretary,Ministry of Power, Government of India. She has been appointed on theBoard of Company as additional Director w.e.f 3rd January, 2012.

The company has received a notice in writing as per Section 257 of theCompanies Act, 1956, signifying intention to propose Smt. Rita Acharya asDirector on the Board of PTC.

The above appointment of Smt. Rita Acharya, as Director being liable toretire by rotation in terms of Section 255 of the Companies Act, 1956 requiresapproval of the Members in the General Meeting. Brief resume of Smt. RitaAcharya is annexed.

Smt. Rita Acharya does not have any shareholding in the Company.

None of the Directors except Smt. Rita Acharya is interested or concernedin the resolution of her appointment. The Board recommends the resolutionfor your approval.

Shri Ravi P. Singh

Shri Ravi P. Singh, aged around 52 years holds a Degree of B.E.( Mechanical)and Post-Graduate Diploma in HR, is Nominee Director of PowergridCorporation of India Limited on the Board of PTC. He has been appointed asan additional Director w.e.f 3rd April, 2012.

The company has received a notice in writing as per Section 257 of theCompanies Act, 1956, signifying intention to propose Shri Ravi P. Singh asDirector on the Board of PTC.

The above appointment of Shri Ravi P. Singh, as Director being liable toretire by rotation in terms of Section 255 of the Companies Act, 1956 requires

approval of the Members in the General Meeting. Brief resume of Shri RaviP. Singh is annexed.

Smt. Shri Ravi P. Singh does not have any shareholding in the Company.

None of the Directors except Shri Ravi P. Singh is interested or concerned inthe resolution of his appointment. The Board recommends the resolution foryour approval.

Shri Anil Razdan

Shri Anil Razdan, IAS (Retd.) aged around 64 years, holds a Degree in B.Sc.(Hons.) and Law Graduate from Delhi University has been appointed asadditional Director on the Board of Company w.e.f. 9th January, 2012.

The company has received a notice in writing as per Section 257 of theCompanies Act, 1956, signifying intention to propose Shri Anil Razdan asDirector on the Board of PTC.

The above appointment of Shri Anil Razdan, as Director being liable toretire by rotation in terms of Section 255 of the Companies Act, 1956 requiresapproval of the Members in the General Meeting. Brief resume of Shri AnilRazdan is annexed.

Smt. Anil Razdan does not have any shareholding in the Company.

None of the Directors except Shri Anil Razdan is interested or concerned inthe resolution of his appointment. The Board recommends the resolution for

your approval.Shri Dhirendra Swarup

Shri Dhirendra Swarup, aged around 67 years, holds a Post GraduateDegree in Humanities has been appointed as additional Director on theBoard of Company w.e.f. 9th January, 2012.

The company has received a notice in writing as per Section 257 of theCompanies Act, 1956, signifying intention to propose Shri Dhirendra Swarupas Director on the Board of PTC.

The above appointment of Shri Dhirendra Swarup, as Director being liableto retire by rotation in terms of Section 255 of the Companies Act, 1956requires approval of the Members in the General Meeting. Brief resume ofShri Dhirendra Swarup is annexed.

Smt. Dhirendra Swarup does not have any shareholding in the Company.

None of the Directors except Shri Dhirendra Swarup is interested orconcerned in the resolution of his appointment. The Board recommends the

resolution for your approval.Shri H.L. Bajaj

Shri H.L. Bajaj, aged around 67 years, holds a Master Degree in PowerSystem and B.E. (Electrical) has been appointed as additional Director on theBoard of Company w.e.f. 9th January, 2012.

The company has received a notice in writing as per Section 257 of theCompanies Act, 1956, signifying intention to propose Shri H.L. Bajaj asDirector on the Board of PTC.

The above appointment of Shri H.L. Bajaj, as Director being liable to retireby rotation in terms of Section 255 of the Companies Act, 1956 requiresapproval of the Members in the General Meeting. Brief resume of Shri H.L.Bajaj is annexed.

Smt. H.L. Bajaj does not have any shareholding in the Company.

None of the Directors except Shri H.L. Bajaj is interested or concerned inthe resolution of his appointment. The Board recommends the resolution for

your approval.

By Order of the Board of Directors

For PTC India Ltd.

(Rajiv Maheshwari)Company Secretary

Place: New DelhiDate: 16th August, 2012


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Brief Profile of Directors seeking Re-appointment at 13th Annual General Meeting

Name Date of Birth Qualifications Expertise Directorship in other Companies Membership/Chairmanship of

committees other than PTC

Shri M. K. Goel 17-09-1956 B.E. (Technology) Shri Mukesh Kumar Goel, aged

about 56 years, is the nomineeDirector of PFC in the Boardof PTC since 8th August 2008.He holds the post of Director(Institutional Development &Administration) in PFC. ShriGoel has a career spanningover 30 years. He also workswith NHPC, He has beeninvolved in inducing reforms inState Power Utilities, steeringRestructured AcceleratedPower Development & ReformProgramme of Government ofIndia.

1. Power Finance Corporation Ltd. (PFC)

2.Orissa Integrated Power Ltd.3.Sakhigopal Integrated PowerCompany Ltd.4.Ghogarpalli Integrated Power Co. Ltd.5.PFC Consulting Ltd.6.Tatiya Andhra Mega Power Ltd.7.PTC India Financial Services Limited8.PFC Green Energy Ltd.9.Chattisgarh Saruja Power Ltd.10.PFC Capital Advisory Service Ltd.

1. PFC

- Member, RemunerationCommittee andShareholders GrievanceCommittee.

Shri S.

Balachandran

27-08-1946 Master in Science

(Msc.)

Shri S.Balachandran, aged

about 66 years is an Ex-Addl.member (Budget), Ministryof Railways & Ex ManagingDirector Indian RailwaysFinance Corporation. He hasrich experience in Finance sector

1.Dredging Corp. of India (DCI)

2.ONGC Petro Additions Ltd. ( OPAL)

3.PTC Energy Limited (PEL)

Audit Committee :

1. PEL2. DCI3. OPAL


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Brief Profile of Directors seeking Appointment at 13thAnnual General Meeting

Name Date of Birth Qualifications Expertise Directorship in other Companies Membership/Chairmanship ofcommittees other

than PTC

Smt. Rita Acharya 13-12-1954 Master Degreein Social work ;AndDiplomain BuisnessAdministration

Smt. Rita Acharya, aged about 57 years is a nomineeDirector of Ministry of Power, Government of India.She is an officer of Central Secretariat Service. She iscurrently Joint Secretary in the Ministry of Power.Before joining Ministry of Power, she has worked inthe Ministry of Finance (Department of EconomicAffairs) and Ministry of Home Affairs and Handledvarious important portfolios like matters relatingto foreign exchange budget, balance of payments,bilateral/multilateral assistance, water supply &forestry projects assisted by World Bank, Centre-State relations, prison reforms & treaties relating torepatriation of prisoners and energy conservation.

1. Powergrid Corporation of IndiaLtd.

NIL

Shri Ravi P. Singh 21-01-1960 B.E.(Mechanical)AndPost- GraduateDiploma in HR

Shri Ravi P. Singh, aged about 52 years is anominee Director of Powergrid Corporationof India Ltd. He has previously held thepositions of Executive Director (Eastern Region-II) and Executive Director (Human ResourceManagement & Corporate Communication) inPowergrid. Shri Singh has over 30 years of workexperience in the power sector, handling various multi-disciplinary functions like HR, Telecom,Contracts, Materials, Planning etc.

1. Powergrid Corporation of IndiaLtd.

2. Powerlinks Transmission Ltd.

NIL

Shri Anil Razan 07-12-1948 B. Sc. (Hons.)(Physics)AndLL.B

Shri Anil Razdan, IAS (Retd.), aged about 64years had joined the Indian AdministrativeService in 1973. Shri Anil Razdan was secretaryof the Government of India in Ministry of Powerduring 2007-2008. He has held various significantassignments in the Government of Haryana, andthe energy sector in the Government of India,including that of Additional & Special Secretarywith the Ministry of Petroleum & Natural Gas.

He has rich experience of Indian Power Sector.

1. Bharat Electronics Ltd.2. Era Infra Engineering Ltd.3. Hindustan Petroleum

Corporation Ltd.4. MMTC Ltd.5. Green Valley Energy Ventures

Pvt. Ltd.6. Era Khandwa Power Ltd.

Audit Committee:

1. BharatElectronics Ltd.

2. HindustanPetroleumCorp. Ltd.

3. MMTC Ltd.

Shri DhirendraSwarup

05-12-1944 Post Graduate inHumanities

Shri Dhirendra Swarup, aged about 67 years, isa Govt. certified Public Accountant and a Fellowof Institute of the Public Auditors of India.Along with this Shri Swarup was member ofthe Board of SEBI, and a member of PermanentHigh Level Committee on Financial Marketbetween July 2005 and December 2009. As formercivil servant, he retired as Secretary, Ministryof Finance, Government of India in 2005, & hasapproximately 42 years of experience in finance,budgeting, audit, public policy. Shri Swaruphas also served as Chairman of Pension FundsRegulatory Authority between 2005 & 2009, Chiefof Budget Bureau of GoI between 2000& 2005. Hehas rich experience of finance sector.

1. Eros International Media Ltd.

2. Financial Planning StandardsBoard, India

3. Financial Planning Corporationof India Pvt. Ltd.

4. United Stock Exchange of India

Eros InternationalMedia Limited1. Audit

Committee;2. Remuneration &

CompensationCommittee

3. InvestorGrievanceCommittee

United StockExchange of India1.Chairman, Audit

Committee

Shri H.L. Bajaj 20-05-1945 Master in powerSystems &B.E.(Electrical)

Shri Harbans Lal Bajaj aged about 67 years. He isFellow- The Institute of Electrical and Electronics(IEEE), U.S.A and Fellow- The Institute of Engineers(India). He has held the positions of Chairman,Central Electricity Authority.Shri Harbans Lal Bajaj has over four decades ofexperience in the development and growth of IndianPower Sector. He has expertise in Engineering,Contracting, Construction, Commercial andHuman Resource Management in NTPC Ltd. Hehas proficiency in Policy making and Regulatorymatters at Apex Level in CEA and AppellateTribunal for electricity and NTPC Ltd.

Nil Nil


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Dear Shareholders,

Your Directors have pleasure in presenting to you, the Thirteenth Annual

Report on the activities of your Company along with the Audited Annual

Accounts for the Financial Year 2011-12.

Performance and Financial Highlights

Your Company has completed another innovative year of its operations,

wherein it has sustained and maintained its leadership position in the

industry. The trading volumes were marginally lower by (0.64%) this year at

24325 MUs as against 24481 MUs during the previous year. With a turnover

of Rs. 77011 million (including other income) for the year 2011-2012 as

against Rs. 90603 million (including other income) in the financial year 2010-

11, your Company has earned a profit after tax of Rs. 1204 million as against

Rs. 1385 million in the previous year.

Your Company has two subsidiaries, namely PTC India Financial Services

Limited (60% owned) and PTC Energy Limited (Wholly Owned). The

consolidated turnover of the group is Rs.81105 million for the current

financial year as against Rs. 92627 million for the financial year 2010-11. The

consolidated profit after tax of the group is Rs. 2041 million for the current

financial year as against Rs. 1660 million for the financial year 2010-11.

The financial results of the company for the FY 2011-12 vis-a-vis 2010-11

under broad heads are summarized as under:-

Financial results of the company for the FY 2011-2012 vis a-vis 2010-2011

Particulars For the Yearended 31.03.2012(inRs. Million)

For the Yearended 31.03.2011(inRs. Million)

Sales (including rebate on purchaseof power, service chargesandsurcharge)

76501.57 89972.75

Other Income ( including incomefrom consultancy services)

509.08 630.41

Purchase (including rebate on sale

of power)

74765.92 88370.81

Employee Cost 119 69.58

Other Expenses etc. 424.10 144.37

Profit before amortization,depreciation and prior period items

1701.63 2018.40

Amortization and Depreciation 44.63 50.34

Prior Period Expenses/(Income) 1.22 0.09

Profit Before Tax 1655.78 1967.97

Provision for Taxation (includingdeferred tax income )

452.12 582.78

Profit After Tax 1203.66 1385.19

Balance as per last accounts 1393.91 938.52

Transferred to General Reserves 361.10 415.56

Dividend (incl. dividend tax) 514.24 514.24

Transfer to contingent reserves - -Balance carried forward to BalanceSheet

1722.23 1393.91

Earning Per Share in Rs. 4.08 4.70

Appropriations

Dividend

Your Directors are pleased to recommend for your consideration and

approval dividend @ 15% for the financial year 2011-12 i.e. Rs 1.5/- per equity

share (which is same as paid in last year) of Rs. 10 each. The dividend if

approved at ensuing Annual General Meeting, will absorb Rs.514.24 million

including corporate dividend tax amounting to Rs.71.78 million.

DIRECTORS REPORT - 2011-2012

The dividend will be paid to members whose name appears in the register

of members as on a record date; in respect of shares held in dematerialized

form whose name is furnished by the Depositories, as beneficial owners.

Reserves

Out of the profits of the Company, a sum of Rs.361.10 million has been

transferred to General Reserves during the year and total reserves and

surplus of the Company are Rs.19551.41 million (including share premium)

as on 31st March 2012.

Public Deposits

The Company has not accepted any public deposits during the year and as

such, no amount on account of principal or interest was outstanding as on

the date of Balance Sheet.

Capital Structure

As on 31st March 2012, PTC has Authorized Share Capital of Rs. 750,00,00,000

and Paid-Up Capital of Rs. 294,97,35,710/- divided into 294,97,3571 equity

shares of Rs.10 each. The equity shares of your Company are listed on the

Bombay Stock Exchange Limited (BSE) and The National Stock Exchangeof India Ltd. (NSE). The promoters i.e. NTPC Ltd. (NTPC), Power Grid

Corporation of India Ltd. (POWERGRID), Power Finance Corporation Ltd.

(PFC) and NHPC Ltd. (NHPC) individually hold 4.07% each, or 16.27%

collectively of the paid-up equity and subscribed share capital of your

Company and the balance of 83.73% of the equity paid-up and subscribed

share capital of your Company is held by Power Entities, Financial

Institutions, Life Insurance Corporation of India and other Insurance

Companies, Banking Institutions, Corporations, Investment Companies,

Foreign Institutional Investors, Private Utilities and others including general

public at large.

The shareholding pattern of your Company as on 31.03.2012 is as follows:-

Category No. of sharesheld

Percentage ofShareholding

A Promoter's holding

1 Promoters

- Indian Promoters 48,000,000 16.27

-Foreign Promoters -

2 Persons acting in concert -

Sub-Total 48,000,000 16.27

B. Non-Promoters Holding

1 Institutions

Mutual Funds and UTI 46151970 15.65

Banks and Financial Institutions 29809273 10.11

Insurance Companies 64452893 21.85

FIIs 42611137 14.45

Sub-Total B(1) 183025273 62.05

2 Non Institutions

Bodies Corporate ( incl. DVC) 23964899 8.12

Individuals

(holding nominal share capitalupto Rs. One lac)

30617738 10.38

Individuals(Holding nominal share capital inexcess of Rs. One lac)

7109124

2.41

Others

-NRIs 2194537 0.74

-OCBs 0 0.00

-Trusts and Foundations 62000 .02

Sub-Total B (2) 63948298 21.68

Total Public Shareholding 246973571 83.73

GRAND TOTAL 294973571 100.00


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Net Worth and Earning Per Share (EPS)

As on 31st March 2012, net worth of your Company aggregates to Rs.22,501.15

Mn as compared to Rs. 21,801.80 Mn for the previous year thereby registering

a growth of 3.21%.

EPS of the Company as on 31.03.2012 stands at Rs.4.08 in comparison to

Rs.4.70 as on 31.03.2011.

MANAGEMENT DISCUSSION AND ANALYSIS

The year gone by has been tough for the world economy. Already troubled

by Europes debt crisis, the world now fears a slowdown in other economies

as well. India managed quite well in the previous crisis and our economy

looked insulated. But the current slowdown is impacting our country as

well, which is reflective of slower GDP growth though India still managed to

grow by 6.5% in FY12. Despite various risks pointed out by analysts, overall

economic outlook of India in the long run is still quite positive.

However to transform this positive outlook into reality, growth of

infrastructure sector will be the key. Among all the sub-sectors of

Infrastructure, energy has a very strong linkage with economy. So to get

back on the path of high growth, energy sector has to grow concurrently.

The government is definitely aware of this fact which is evident from the

attention power sector got in the recent budget. The fact that fuel supplyconstraint is affecting the production was duly recognized and customs

duty on imported coal was waived off for the year. Power companies also

got permission to avail of External Commercial Borrowings (ECBs) to part

finance their rupee debt. Quantum of tax-free bonds for the sector was also

doubled to INR 100 billion. These incentives may be seen as an important

step towards realizing the targets set for 12th plan.

Even as the Government is drawing up ambitious plans envisaging 90 GW

of capacity addition in the 12th plan, countrys power sector is facing some

multidimensional challenges. These issues are constraining the growth of

power sector and are creating slight negative sentiment among investors.

The biggest issue facing the sector is poor financial health of discoms.

Shunglu Committee has been critical that restructuring of erstwhile vertically

integrated entities was more in form than substance. The current condition

of discoms was attributed to a gap of about INR 0.60/kWh between average

cost and average revenue and operational and management issues coupledwith regulatory shortcomings. The report suggested setting up of a Special

Purpose Vehicle (SPV) to buy out distressed debts of banks to discoms on

certain preconditions.

The poor financial health of discoms had its impact on PTC business

operations as well this year. Payment security thus far was satisfactory at

National level, but this year we faced unprecedented difficulties in realizing

our dues from some State discoms particularly from Uttar Pradesh and

Tamil Nadu. However, we have got assurance from these States that they

will liquidate our outstanding in a progressive manner.

Appellate Tribunals (APTELs) landmark judgment directing all State

Electricity Regulatory Commissions (SERCs) to decide tariff before 1st

April of particular year and initiate suo motu proceedings in case discoms

failed to file tariff petitions will help in tariff revisions thereby bridging the

gap between cost and revenue of the discoms. A number of States have

initiated tariff revision which will help these utilities come in better financial

position.

Another major issue is shortage of fuel, particularly coal. Demand for coal

has been growing while Coal India Ltd.s (CILs) production has been

more or less stagnant for past couple of years. Persistent fuel shortage may

have implication on growth of trading volumes of PTC in future as many

developers out of our sizeable coal portfolio depend on CILs linkage.

There are indications that new Fuel Supply Agreement (FSA) issued by CIL

will assure 65% of the contracted quantity with a penalty of 10% for short

supplies. However, the minimum supply level may get increased to 72%

after three years and reach the 80% mark in five years.

Considering the coal supply situation compared to the demand, it looks like

that dependence on imported coal will go up. Projections suggest that there

will be a deficit of up to 265 Million Tonnes (MT) of domestic coal by FY17.

This provides a window of opportunity for our subsidiary PTC Energy Ltd.

(PEL). We have been sourcing coal for our Independent Power Producers

(IPPs) on their request and we see a substantial rise in coal trading volumes

in the coming years.

Case-1 bidding, made mandatory for procurement of power in long/medium-

term (LT/MT) from Jan2011, has not seen much progress in past year and

the whole process has been plagued with issues. Procurers sometimes resort

to negotiation/counter offer with bidders to match L1 tariff which dilutes the

very process of competitive bidding. There have been cases when procurers

didnt fulfill commitment as per Letter of Intent (LOI) or even cancelled LOI

resulting in loss of opportunity for bidder to participate in other bids. It is

because of these and various other issues in Case-1 bidding that we feel

that MoU route should continue as an alternative to competitive bidding.

According to the interpretations of relevant provisions of the Electricity Act

by senior Supreme Court advocates, both the alternatives are available to the

procurers. Utilities are being sensitized to go for both the options so as to

remove the uncertainties associated with present case-1 bidding.

There is a trend visible in the market that discoms are increasingly resorting

to procurement of Medium-term (MT) power through Case-1 bidding.Madhya Pradesh invited bids for supply of 500 MW power in medium-term.

Your company participated in the bid and is competitively placed according

to the financial bids.

Ministry of Power (MoP), Government of India (GoI) have issued Guidelines

for Short-term (ST) Procurement of Power. The positive aspect of these

guidelines is that only serious players with adequate financial strength will

be able to participate in bidding.

There were some positive movements to handle the difficulties towards full

scale Open Access (OA) in distribution. Ministry of Laws opinion on OA

stating that consumers of load of more than 1 MW are deemed OA customers

and cannot be denied Open Access will strengthen the legal argument of

such customers. The impact will not be immediate but huge opportunities

are opening up. To seize these opportunities, your company has started a

Strategic Business Unit (SBU) namely PTC Retail which has already tied

up with about 100 OA customers. The clientele spans across various StateUtilities, Industrial Consumers, Captives, etc. trading power and Renewable

Energy Certificates (RECs) through PTC on power exchanges. PTC Retail

aims to increase its presence across India to take the early mover advantage

and to provide third-party access to loads exceeding 1 MW by playing the

role of an aggregator.

On regulation front, CERC amended various regulations.Amendments in

Grid Code are a welcome move as these will help in aligning grid code with

the regulations resulting in better grid discipline. CERC also tightened the

frequency band for Unscheduled Interchange (UI) thereby resulting in lower

UI volumes in ST market. Since UI has implication on grid security, this is

a progressive move. Amendments were also made in Sharing of Inter-state

transmission charges and losses bringing clarity on the newly introduced

Point of Connection (PoC) pricing mechanism.

CERC (Payment of Fees) Regulations has been amended to hike the license fee.

Accordingly, fees for Category-1 trading license has increased significantlyfrom current INR 3 million to INR 4 million. Draft amendment have also been

proposed in Grant of Trading License Regulations which will impose more

stringent compliance requirements on the traders and disallow power sale

to entities who default in payment of dues to Powergrid, central generating

units etc. Your company has submitted to Honble Commission that in a

scenario where many of the power utilities have outstanding payments to

one or the other stakeholders, such regulation may have a negative impact

on short term trading business.

Trading licensees feel that there is a need for a formal Association of Power

Traders (APT). Hence, the process of formulation of APT has been started to

provide a forum for addressing issues of common interest affecting power

traders among other objectives.


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Short-term (ST) market grew by 16% YoY to 94.5 Billion Units (BUs) in FY12.

Traders have been playing a vital role in the development of ST market which

is evident from the fact that bilateral trading contributed ~40% in the total ST

market in FY12 and grew by 23% YOY. Direct Bilateral constituted 16% of

the ST market in FY12 but grew by 50% YoY. A major chunk of this growth

was because of increase in banking transactions (cashless transactions where

utilities borrow power during days of power deficit and return the samein kind during power surplus days) which in turn might be due to poor

financial health of utilities. Comparatively, volume on power exchanges (PX)

grew only by 9.5% YOY against the last year growth of 100% and UI volume

reduced by 1% YOY (mainly because of frequency band reduction by CERC)

which is a positive development. There is lot of scope of improvement and

expansion of market as UI still constitutes 29% of the market.

Price in bilateral market remained slightly higher than PX for most part

of the year indicating that buyers are ready to pay premium for certainty

of power. Also bilateral prices were less volatile than PX prices. Average

prices over the year continue to show downward trend primarily due to

diminishing purchasing power of utilities. This presents an artificial and

distorted picture of the market. This aberration in the market has affected

the market sentiments in the new builds of private sector. However, the way

things are, there might be increased demand-supply gap which is expected

to pull up the prices. Analysts have carried out sensitivity analysis to

understand the impact of imported coal on prices in the current year, cost

of power produced from 100% imported coal comes around INR 4.5/kWh

which is 50-60% higher than that produced from 100% domestic coal.

As far as performance of your company is concerned, it traded 24.3 BUs

of electricity with a market share of 43% (including cross-border and

intra-state trades). Despite challenges, PTC has maintained its market

leadership position. The volume is slightly lower than last year but this is

despite regulated supply to some States (primarily TN and UP, causing

an approximate opportunity loss of more than 4000 Million Units [MUs]),

which is an achievement in itself. Trade on power exchanges by PTC also

declined by 11% YOY to 3.2 BUs because of this.

Most of the power traded by us was on Round The Clock (RTC) basis95.7%

which is a percentage point less than last year the remaining power being

Peak and other. Because of the regulated trade with Tamil Nadu and Uttar

Pradesh, trade with Captive power plants dropped significantly by 70% to

1186 MUs.

Our top 5 suppliers of electricity in FY12 were Government of Himachal

Pradesh, Lanco, J&K State Power Development Corporation, West Bengal

State Electricity Distribution Company Ltd. and Torrent Power. Our top

5 buyers in FY12 were Uttar Pradesh, West Bengal, Punjab, Haryana and

Bihar.

Cross-border trade with Bhutan dropped slightly to 5.3 BUs in FY12 (5.6 BUs

in FY11) on account of increased domestic demand in Bhutan. Nevertheless,

the trade with Bhutan has been more or less stable and has entered into 10th

successful year. It remains an important part of our portfolio. Your company

also supplied 69 MUs to Nepal, 50% increase YoY. PTC has also signed Power

Sale Agreement (PSA) with Nepal Electricity Authority (NEA) for supply

of 150 MW coal based thermal power on LT basis. This power may start

flowing in next 2-3 years. Your company has also been playing a catalytic

role in the up-gradation of Indo-Nepal transmission interconnections. Apartfrom this, your company also signed a Memorandum of Agreement (MoA)

with GMR for its 600 MW Marsyangdi project in Nepal.

With Bangladesh, talks were going on earlier for supply of 250 MW. Now

that they have invited competitive bids for that quantum from Indian

stakeholders, we are actively participating in the same. We also participated

in pre-bid meeting and offered solutions to Bangladesh Power Development

Board (BPDB) which are under consideration.

As you are aware, PTC has been working on two tolling projects for quite

some time. In these projects, PTC will source the fuel, own the power

produced from these projects and a pay a conversion charge to the developer.

The first unit of one of the project has been commissioned in May 2012 and

the second unit has been commissioned in July, 2012 and your company is

successfully selling that power in the market.

Renewable Energy (RE) has been growing in the country at a fast pace.

Your company is also playing an increasingly important role in RE. We are

facilitating sale of solar power between solar developers and solar power

consumers through mutually beneficial trading arrangements and providing

advisory solutions for development/marketing of solar projects. Renewable

Energy Certificates (RECs) trading started last year on power exchanges

and has shown tremendous growth over the year. Your company is also

facilitating various entities in meeting their Renewable Purchase Obligations

(RPOs) through sale of Renewable Energy Certificates (RECs) and has

traded ~60000 RECs (1 REC= 1MWh of RE) in FY12. Since RPO are going

to increase every year, this market is expected to grow at a healthy rate and

your company is committed to play an important role.

Our subsidiary, PFS, is also financing development of Renewable power

projects. So far, it has funded 22 projects (Wind, Biomass, Solar, Small

Hydro), total funding being INR 7900 million.

PFS, this year, recorded revenue of INR 3072 million compared to INR 1088.5

million last year. PAT increased to INR 1540 million in FY12 compared to

INR 370 million in FY11, an increase of 316%. Major contribution in this year

figures was from gain on sale of equity investments (INR 1050 million). PFSconcluded sale of its part stake in Indian Energy Exchange (IEX) bringing

its stake in the exchange to 5%. The company does not have any NPA as on

31st March, 2012.

PTC Energy Ltd. (PEL) purchased and sold 424,061 Metric Tonne (MT) of

imported coal in FY12 realizing a profit of INR 28.8 million, an increase of

127% over FY11. As dependence on imported coal in the country is expected

to grow, PEL is exploring avenues for adding new suppliers and buyers

under its umbrella of fuel intermediation on competitive basis.

PTC has also been able to make substantial progress in the area of energy

efficiency management and had been able to generate a total revenue of

around INR 7.5 million by the ensuing year. Out of the seven BEE entrusted

Energy Efficiency Investment Grade Energy Audit studies , Presidents

Estate, All India Institute of Medical Sciences (AIIMS), and Indira Gandhi

Employees State Insurance (IGESI) Hospital (Jhilmil, New Delhi) had issued

LOI for implementation of energy cost saving measures on the EnergySavings Company (ESCO) concept (a concept where savings achieved are

shared), Presidents Estate has been concluded and others are in different

stages of implementation.

Last financial year was tough for the entire power sector but outlook for the

sector in medium and long term remains positive. Going forward, it is felt

that the key issues such as fuel, tariff revisions and financial health of discoms

would get resolved due to intervention from the highest level of government

and progressive steps of the regulators. PTCs constant endeavor will be to

provide our customers with quality service, long term trusted partnership

and to contribute positively towards the development of power market.

Domestic Trading

Your Company has completed another significant year of its operations.

This year has been turbulent considering the deteriorating financial health

of the state power utilities but still the company has maintained and

sustained its position in the industry. There has been rise in the domestic

trades by maintaining the continuous interaction with customers, providing

innovative solutions and managing the key portfolio of some states. Your

Company remains the front runner in the power trading market.

PTC achieved a trading volume of 24325 MUs during 2011-12 against the

previous year figure of 24481 MUs which witnessed a marginal drop of 0.64%

over the previous year. PTCs volume on power exchanges during 2011-12

reached 3596 MUs against the previous year figure of 4044 MUs which has

witnessed a decreaseof 11.08% over the previous year. Share of PTC traded

volume on Power Exchange is about 14 .78% of its portfolio. Long term power

from projects have started contributing to trading volumes and the total MU

traded from projects under long term PPA reached 4749 MUs.


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Your Company extended its existing agreements with Chhattisgarh,

Government of Himachal Pradesh and CPPs/IPPs for sale of their surplus

power for period ranging between 1 to 3 years.Negotiations are in advance

stage with some other surplus States/Utilities for signing agreements on

similar lines. PTC for the first time supplied power under Medium Term

Open Access (MTOA) basis to some state utilities. The power plant under

the power tolling arrangement has been commissioned and presently theirpower is being sold under short term/power exchange. The Company also

carried out a significant number of energy banking transactions during the

year.

Power trade with Bhutan

Your Company continues to import power from 3 hydroelectric projects in

Bhutan under long term bilateral arrangement.

Surplus power from 336 MW (4X84 MW) Chhukha project is being supplied

to the Eastern Region constituents namely Bihar, DVC, Orissa, Jharkhand,

Sikkim and West Bengal.

Surplus power from 60 MW (4X15 MW) Kurichhu project is being supplied

to Eastern Region constituents namely West Bengal and DVC.

Surplus power from 1020 MW ( 6X170 MW) Tala project is being supplied to

Bihar, DVC, Orissa, Jharkhand and West Bengal in the Eastern Region and toDelhi, Haryana, J&K, Punjab, Rajasthan and Uttar Pradesh in the Northern

Region.

During the year 2011-12, the total energy imported from Bhutan was 5275

MUs which is 5% less than the energy imported during the year 2010-11.

This less import is due to the increase in consumption of power in Bhutan.

Power Trade with Nepal

The bilateral exchange of power between the two countries is carried out

under two categories: (a) arrangement under Indo-Nepal Power Exchange

Committee and (b) commercial power transactions

Under commercial arrangement, your Company exports power to Nepal to

meet their urgent requirement. Generally power on commercial principles is

supplied to Nepal Electricity Authority (NEA) during winter months when

their own hydro generation drops significantly. Your Company arranged 20

MW RTC power from 1st December 2011 till 30th April 2012 and about 73MUs were exported to Nepal.

Your Company is also exploring possibilities of entering into long term

PPAs with the prospective IPPs in Nepal for import of power through new

transmission corridor being proposed between India and Nepal. During

this fiscal, PTC has signed a long term power trade agreement with NEA to

supply them 150 MW power for 25 years. The supply of 150 MW is expected

to commence after commissioning of 400 KV Mujaffarpur (India) and

Dhalkebar (Nepal) transmission line in next 2 to 3 years.

Power Exchange Operation

The share of power exchange in the short term market is growing at best

rate ofgrowth (9.5%), which have been lower as compared to the growth in

the bilateral trade (23.57%). In absolute terms, volume traded on exchange

(excluding TAM) increased by about 9.5% from about 13.54 BU in the FY 2011

to 14.82 BU in the FY 2012. At present, two national power exchanges are inoperation namely Indian Energy Exchange and Power Exchange of India

Ltd. Indian Energy Exchange (IEX), co-promoted by PTC Group continues to

be the dominant player in the power exchange market in India. There is also

a sharp increase in the client members on the IEX. More than 1200 members

are availing exchange facility to predominantly meet their day ahead power

requirement. CERC has also given nod to a third power exchange in India,

namely National Power Exchange Ltd. promoted by NTPC, NHPC, PFC and

Tata Consultancy Services (TCS) which is expected to be operational in near

future. The long-term objective of exchanges is to drive the Indian power

sector towards competition-based pricing that will ultimately benefit the end

consumers.

PTC is among the leading members of both the exchanges and has the biggest

portfolio of State Utilities trading power on the exchanges via traders. Apart

from the state utilities, PTCs list of clients range from various high power

consumption industries to captive power plants in the states.

PTC entered into Agreements with SJVNL, NEEPCO and NHPC for sale of

power from their plants in the power exchanges which was being regulated

by them due to nonpayment of dues by the state utilities /distribution

companies.

PTC provides its clients with a unique service of daily Power Status Report

which includes information on price & volume of the power traded, weather

forecast and system related information enabling the clients to schedule/

plan their daily power requirements as also assist in predicting their power

supply/demand in future on the basis of comprehensive details.

Long Term Agreements for Purchase of power

(A) Commissioned Projects

i. Power Projects commissioned before FY 2011 12

(a) Baglihar HEP (450 MW) and Middle & Lower Kolab HEP (37

MW) were commissioned in the FY 2009-10. PTC has a contracted

capacity of 225 MW from 450 MW Baglihar HEP and the balance

power is being consumed within the state of J&K. Out of 225 MW

capacity, PTC has entered into long term agreements for 150 MW

and the balance 75 MW is being sold by PTC through short term

contracts. Energy from Middle & Lower Kolab aggregating to 37

MW is being supplied to GRIDCO through long term agreements.

(b) Samal HEP in Orissa for 20 MW has been commissioned in October,

2009. Entire capacity from the project is being supplied to GRIDCO

through long term agreement.

(c) Pathadi Thermal Power Plant being developed by M/s. Lanco

Amarkantak Power Ltd. for Phase-I 300 MW has been commissioned

in June, 2009. PTC is trading the power from the project in the short

term market.

(d) SUGEN Gas Based Power Project developed by Torrent Group has

been commissioned in August, 2009. PTC has signed PSA with the

MPPTC, for sale of 100 MW plant capacity from the project. Poweris flowing to MPPTC through PTC.

ii. Power Projects commissioned in FY 2011 - 12 and expected to be

commissioned in FY 2012 - 13

Pathadi Thermal Power Plant (Phase-II, 300 MW)

The Project being developed by M/s. Lanco Amarkantak Power

Limited for Phase-II 300 MW has been commissioned. PTC has

signed Power Sale Agreement with Haryana and presently 65%

power from the Project is being supplied to Haryana through

PTC.

Simhapuri tolling project in Andhra Pradesh (200 MW)

Both Unit 1 and Unit 2 of 150 MW each have been successfully

commissioned in May, 2012 and July, 2012 respectively. PTC has

signed Power Tolling Agreement wherein the power plant wouldgenerate power using imported coal supplied by PTC and supply

power to PTC. The project is developed by M/s. Simhapuri Energy

Pvt. Ltd. Presently, PTC is selling the power in the short term

market.

Meenakshi Energy tolling Project in Andhra Pradesh (150 MW)

The Project is in advanced stage of construction and is expected to

be commissioned during FY 2012-13. This power is under tolling

concept wherein the power plant would generate power using

imported coal supplied by PTC and supply power to PTC. The

project is being developed by M/s. Meenakshi Energy Pvt. Ltd.


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various socio-economic, educational and health initiatives which focus on the

welfare of the economically and deprived sections of society. The Company

facilitates programs and gives direct assistance to individuals, societies and

other charitable organizations.

Employee Stock Option Scheme 2008

Shareholder approval of the scheme was obtained at the Annual GeneralMeeting held on August 6th, 2008 for introduction of Employee Stock Option

Plan at PTC India Ltd. Two grants have been made under the ESOP 2008.

Disclosures stipulated under the SEBI Guidelines have been made.

Period of Vesting for PTC India Ltd.

As per PTC India Ltd. Employee Stock Option Plan 2008, there shall be a

minimum period of 1 (one) year between the grant of options and vesting of

options. Subject to participant's continued employment with the Company

or the subsidiary and restrictions if any set out in case of terminal events, the

Unvested Options shall vest with the Participants over a four year period as

per the following schedule.

Vesting No of years fromthe grant date

% of optionsvested

Cumulative % ofoptions vested

1st

1 15% 15%2nd 2 15% 30%

3rd 3 30% 60%

4th 4 40% 100%

Exercise Period for PTC India Ltd.

Subject to the conditions laid down for terminal events (death, permanent

incapacitation of the employee etc), the vested options shall be exercisable

within a period of 5 (five) years from the first vesting date.

Period of vesting for PFS Ltd.

Options will vest over four years from the date of grant

End of year (from the

date of grant)

% of Vest

1 15%

2 15%

3 30%

4 40%

Exercise Period for PFS Ltd.

Maximum of 3 years from the date of vesting or listing of shares on a

recognised stock exchange, whichever is later.

Conservation of Energy & Technology Absorption

As your Company is engaged in the activity of trading of power and other

related activities, the particulars relating to conservation of energy and

technology absorption respectively are not applicable to it.

Foreign exchange earnings & outgo etc.

The Company has incurred an expenditure of Rs.1.52 Million (on accrual

basis) in foreign exchange during the financial year 2011-2012. No foreign

exchange was earned during the financial year.

Particulars of the employees u/s 217 (2A)

Information as per Section 217(A) of the Companies Act, 1956 read with

Companies( Particulars of Employees) Rules, 1975 as amended regarded

employees is as under :

During the Financial Year ending 2012, no employee was employed for full

or part of the year, who was in receipt of remuneration, which in aggregate

or as the case may be, at a rate which, in the aggregate was not less than

Rs. 60 lacs per annum or Rs. 5 lakh per month except the following employees

the details of whom are given below:-

Name Shri T. N. Thakur Shri Deepak Amitabh

Designation CMD Whole- Time Director

Qualification BSc. + Ex- IA&AS MSc.+ Ex- IRS

Nature of EmploymentWhether contractual or otherwise

CMD Whole Time Director

Nature ofDuties of employees

Overall Managerialfunctions ofcompany

Director (Finance)

Last employment held Power FinanceCorporation Ltd.

Government of India

Number of years of experience 39 28

Age 63 51

Date of commencement ofemployment (at Board Level)

11.10.2000 25.01.2008

Gross Remuneration (figures inRs. Million)

11.88 Million 6.23 Million

No. of Equity Shares held (of Rs.10/- each)

1,94,490 79,557

Whether Relative of a Director or

Manager

No No

Other terms and conditions ofEmployment

- -

Auditors

Statutory Auditors

M/s K.G. Somani & Co., Chartered Accountants, New Delhi were appointed

as Statutory Auditors of your Company in the 12thAnnual General Meeting

of the Company and who will cease to be Statutory Auditors of the Company

at ensuing Annual General Meeting and are eligible for reappointment.

The Statutory Auditors have audited the Accounts of the Company for the

Year ended 31 March 2012 and Audited Accounts together with the Auditors

Report thereon are annexed to this report. The observations of the Auditors

in their Report on Accounts read with the relevant notes to accounts are self-

explanatory.

The Board recommends the appointment of M/s. K.G. Somani & Co. as the

Statutory Auditors of the Company for the Financial Year 2012-2013 by the

Shareholders in the 13th Annual General Meeting of the Company.

- Internal Auditors

M/s. Ravirajan & Co. Chartered Accountants, New Delhi were appointed as

Internal Auditors of the Company for the Financial Year 2011-2012 and their

reports for the year were submitted to the Audit Committee.

- Cost Auditors

The cost auditors of the Company for FY 11-12 for the 4 X 1.5 MW wind

farm project of PTC is located at Sinnar, Nashik in Maharashtra are M/s.

Ramanath Iyer & Company.

Subsidiary Companies

PTC India Financial Services Ltd. (PFS)

PTC India Financial Services Limited (PFS) is a subsidiary of PTC India

Limited wherein PTC holds 60% stake. PFS is listed on NSE and BSE and has

been granted status of Infrastructure Finance Company (IFC) by the Reserve

Bank of India.

The operational and financial performance of PFS during the year 2011-12

has been quite robust and PFS maintained the growth momentum. During

the year, PFS disinvested its equity stake in two companies viz. Ind-Barath

PowerGencom Limited and Indian Energy Exchange Limited and realized

a gain of Rs.1,272.43 million on such sale. The total revenues for the year


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increased to Rs.3,071.99 million compared to Rs.1,088.52 million during

the previous year, thus, recording a growth of 182%. The profit before

tax increased by 292% during the current year to Rs.2,016.41 million from

Rs.514.31 million in 2010-11 and the profit after tax recorded an increase

of 316% during the current year and increased to Rs.1540.43 million from

Rs.370.27 million during the year 2010-11. Earnings per share increased to

Rs.2.74 during 2011-12 from Rs.0.85 in 2010-11. Excluding the gain on sale ofinvestments, profit after tax grew 81% to Rs. 489.50 million during 2011-12

from Rs.270.50 million during 2010-11.

PFS sanctioned debts aggregating to Rs.36,923 million during 2011-12

compared to Rs.17,030 million sanctioned during the previous year. The level

of disbursement of debt was Rs.6,241.75 million during the year compared

to Rs.6,236.64 million during the previous year. There were disbursement

requests aggregating to Rs.420.63 million outstanding as at 31st March 2012

and the amount in respect of such applications has been disbursed during

current FY 2012-13. The total effective commitments for debt sanctioned as at

31st March, 2012 increased to Rs.58,601 million as against Rs.33,649 million

as at 31st March 2011. There are Nil NPAs as at 31st March 2012.

During FY 2011-12, PFS executed external commercial borrowing (ECB)

agreement with International Finance Corporation for long term loan of

upto USD 50 million. As at 31st March 2012, PFS has ECB agreements for

borrowing upto an aggregate of USD 76 million and against the same, ithas borrowed sum of USD 26 million till 31st March 2012. Being an IFC, the

Company also successfully raised Rs.1,596 million by way of secured long

term tax saving infrastructure bonds carrying benefits under Section 80CCF

of the Income Tax Act, 1961. During FY 2011-12, PFS also set its footprint

outside India by sanctioning term loan to a hydro power project based in

Nepal. The power generated by the hydro project would be evacuated to

India through a cross border transmission line being executed by IL&FS and

would assist in meeting the rising power demand in the northern part of the

country.

PTC Energy Limited (PEL)

PTC Energy Limited (PEL), subsidiary of your company was set up in 2008 to

undertake various activities related to business of power generation, import

of coal and other allied works. During the year 2011-12, your company has

contributed further equity of Rs. 140 million and total equity contribution in

PEL stood at Rs. 550 million as at 31st March 2012.

The domestic availability of coal is the biggest challenge faced by the power

sector. PEL has entered in to the fuel intermediation business to bridge the

gap and has acquired a position of strength for tying up long term coal supply

catering to the varying coal requirements of customers. PEL is engaged in

purchase of imported coal and onward supply to power producers.

During the year 2011-12, PEL has purchased and sold 4.24 lakh MT of coal

as against 2.80 lakh MT in FY 2010-11. PEL has earned a total income of

Rs. 1625.96 million and Profit after tax of Rs. 28.81 million in FY 2011-12 as

compared to total income of Rs. 938.25 million and Profit after tax of Rs. 12.71

million respectively in FY 2010-11.

PEL has also invested Rs. 234.0 million constituting 48% equity in RS India

Global Energy Limited with a view to undertake joint development of wind

farm in Tamil Nadu.

Annual Accounts and information of the Subsidiary Companies under

Section 212 of the Companies Act, 1956

The Ministry of Corporate Affairs, Government of India, vide its Circular

dated 8th February, 2011 has granted exemption to all Companies from

attaching the financial statements of its subsidiaries companies, pursuant to

Section 212(8) of the Companies Act, 1956, subject to compliance of certain

conditions by the Companies as prescribed in this circular.

Accordingly, the Board of Directors in their meeting held on 30th May,

2012 has given their consent and passed the appropriate resolution for not

attaching the copies of balance sheet, statement of profit& loss accounts

and reports of the board of directors and auditors of subsidiaries with the

balance sheet of the Company. In terms of said circular, your Company has

fulfilled the prescribed conditions and also made necessary disclosures in the

Consolidated Balance Sheet and further undertakes that the Annual Accounts

of the Subsidiary Companies and the related detailed information shall be

made available to Shareholders of the Company interested in obtaining

the same. As directed by the Central Government, the financial data of the

subsidiaries has been furnished in the Annual Report of the Company. TheAnnual Accounts of Company including that of Subsidiaries will be kept for

inspection during business hours at the Registered office of the Company

and of the respective Subsidiary Company. Further, pursuant to Accounting

Standard-21 (AS-21), Consolidated Financial Statements presented by the

Company include financial information about its subsidiaries.

Investment in other Companies (Amount Released up to March, 2012)

1. Your Company has earlier executed Equity Subscription Agreement

(ESA) for investment in Athena Energy Ventures Pvt. Ltd. (AEVPL). As

of now PTC has released Rs. 1500 Million and the other investors of this

Company are Athena Group, IDFC and IFCI.

2. Your Company has earlier executed Equity Subscription Agreement

(ESA) for investment in Krishna Godavari Power Utilities Limited

upto Rs. 400 Million and as of now PTC has released Rs. 375.53 Million

(including 180.50 Million for share application money).3. Teesta Urja Limited is developing 1200 MW Teesta-III Hydro Electric

Project in the State of Sikkim. Your Company has acquired 11%

subscribed equity in Teesta Urja Limited and has released Rs. 1414

Million.

4. Your Company has also formed a Joint Venture Company i.e. Chenab

Valley Power Projects Private Limited (CVPPPL) with NHPC and

JKSPDC and as of now PTC has released Rs. 1 Million.

Directors Responsibility Statement

In pursuance of Section 217 (2AA) of the Companies Act 1956, the Directors

make the following responsibility statement that:

1. In the preparation of the Annual Accounts, the applicable Accounting

Standards have been followed by PTC along with proper explanation

relating to material departures;

2. The Directors had selected such Accounting Policies and applied them

consistently and made judgments and estimates that are reasonable and

prudent so as to give a true and fair view of the state of affairs of the

Company at the end of the Financial Year 2012 and of the profit of the

Company for that period;

3. Proper and sufficient care had been taken by the Directors for

maintenance of adequate Accounting records in accordance with the

provisions of the Companies Act 1956 for safeguarding the assets of

the Company and for preventing and detecting frauds and other

irregularities and

4. The Annual Accounts had been prepared on a going concern basis.

Report on Corporate Governance

As a listed Company and a good corporate entity, the Company is committed

to sound corporate practices based on conscience, openness, fairness,

professionalism and accountability paving the way in building confidence

among all its stakeholders for achieving sustainable long term growth and

profitability.

Companys philosophy on the code of governance

Corporate Governance implies governance with highest standards of

professionalism, integrity, accountability, fairness, transparency, social

responsiveness and business ethics for efficient and ethical conduct of

business. Your Companys endeavor has been to inculcate good Corporate

Governance practices in its organizational and business systems and

processes with a clear goal to not merely adhere to the letter of law to comply


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with the statutory obligations, but also to center around following the spirit

underlying the same.

The Corporate Governance practices followed by the Company include

the corporate structure, its culture, policies and practices, personal belief,

timely and accurate disclosure of information, commitment to enhancing the

shareholder while protecting the interests of all the stakeholders.

Your Company is committed to and firmly believes in practicing good

Corporate Governance practices as they are critical for meeting its obligations

towards shareholders and stakeholders. The Companys governance

framework is based on the following principles which adhere to sound

Corporate Governance practices of transparency and accountability:

Constitution of Board of Directors with an appropriate blend of

Executive and Non Executive Directors committed to discharge their

responsibilities and duties.

Strict Compliance with all governance codes, Listing Agreements, other

applicable laws and regulations.

Timely and balanced disclosure of all material information relating to

the Company to all stakeholders.

Adoption of Code of Conduct for Directors and Senior Management,

and Code of Ethics and Policy on Prohibition of Insider Trading and

effective implementation thereof.

Sound system of Risk Management and Internal Control.

Regular update of PTC website www.ptcindia.com to keep stakeholders

informed.

1. Board of Directors

(A) Composition of Board

The composition of Board of Directors is in conformity with the Clause

49 of Listing Agreement, as amended from time to time. The Board of

Director(s) along with its Committee(s) provide leadership and guidance

to the Companys management and directs, supervise and controls the

performance of the company. The Board of Director(s) of the Company

comprises of distinguished personalities, who have been acknowledged in

their respective fields. As on the end of Financial Year 2011-12, the Boardcomprises of 14 Directors out of which 2 are Executive Directors and 12 are

Non-Executive Directors, more than 50% of total number of Directors are

Independent Directors. The Company is headed by CMD.

The current composition of Board of Directors as on the date of this report of

your company is as under:

Category Name of Directors

Chairman & ManagingDirectorWhole- Time DirectorNon- Executive Directors

Shri T.N. Thakur

Shri Deepak AmitabhSmt. Rita Acharya , Nominee-MOPShri A.B.L. Srivastava,Nominee- NHPCShri M.K. Goel, Nominee- PFCShri I.J. Kapoor, Nominee- NTPC*Shri Ravi P. Singh, Nominee-POWERGRIDShri S. BalachandranShri Hemant Bhargava, Nominee-LICShri Ved Kumar JainShri Dipak ChatterjeeShri Anil RazdanShri Dhirendra SwarupShri H.L. Bajaj

All Independent Directors of the Company qualify the conditions of their

being independent.

* Shri Ravi P. Singh, has been appointed on the Board of the Company

w.e.f. 03rd April, 2012

(B) Non- executive Directors compensation and disclosures

The Company had not paid any remuneration to any of its Non-Executive

Directors, except the Sitting fees for attending the meetings of Board/

Committees for those who accept the same.

Sr. No. Meetings *Sitting fee per Meeting(Rs.)

1 Board Meetings 20,000

2 Committees Meetings 20,000

* The Sitting Fee to nominee Directors of Promoter Companies/ LIC of

Indiais directly paid to the respective Promoter Company/ LIC.

(C) Other provisions as to Board and Committees

(i) Details of Board Meeting held during the Financial Year 2011-2012

During the financial year ended 31st March 2012, the Board met Seven

(7) times as against the minimum requirement of four Board Meetings.

The details of the Board Meeting are as under :-

Sr. No. Date Board strength Number of Directorspresent

1234567

15thApril, 20119thMay, 20118thAugust, 20119th November, 201131stJanuary, 201213thFebruary, 201222ndMarch, 2012

14141412151515

1310108

121212

ii) Directors Attendance Record and Directorship in other companies as

on 31st March, 2012

Sr.No

Name of theDirector

Board Meetings inFY 11-12

Attendanceat Last

AGM(held on

28.09.2011)

No. of otherDirectorships

held as on 31st

March, 2012

No. of othercommittee

Membershipas on 31st

March, 2012

Heldduring

theTenure

Attended

1 Shri T. N. Thakur 7 7 Y 4 Nil

2 Shri DeeepakAmitabh

7 7 Y 3 3

3 Smt. Rita Acharya 3 1 N.A 1 Nil

4 Shri AkhileshMishra

4 1 N 2 Nil

5 Shri A.B.L.Srivastava

7 4 N 3 1

6 Shri M.K. Goel 7 4 N 10 1

7 Shri I.J. Kapoor 7 6 N 6 1

8 Shri S.Balachandran

7 6 N 3 3

9 Shri HemantBhargava

7 5 N Nil Nil

10 Shri Ved Jain 7 6 N 6 5

11 Shri DipakChatterjee

7 7 N 1 Nil

12 Shri Anil Razdan 3 3 N.A. 6 3

13 Shri DhirendraSwarup

3 3 N.A. 3 2

14 Shri H.L. Bajaj 3 3 N.A. Nil Nil

15 Shri V.M. Kaul 4 4 N.A N.A. N.A.


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16 Shri Satish Mehta 3 0 N N.A. N.A.

17 Shri SudhirKumar

4 2 N N.A. N.A.

18 Shri R.N. Nayak 3 3 N N.A. N.A.

19 Shri D.P.Bagchi 3 3 Y N.A. N.A.

20 Shri P. Abraham 3 2 N N.A. N.A.

*Y=Yes,N= No,N.A.= Not Applicable

* In line with Clause 49 of listing Agreement, only the Directorship

of Audit & Shareholders Grievance Committee have been taken

into consideration in reckoning the membership/ chairmanship of

committees.

In terms of Listing Agreement, none of the Director on the Companys Board

is a member of more than ten (10) committees and Chairman of more than

five (5) committees (Committees being, Audit Committee and Investor

Grievance Committee) across all the companies in which they are Director.

All the Directors have made necessary disclosures regarding Committee

positions held by them in other companies and do not hold the office of

Director in more than fifteen (15) public companies.

The Non-executive Directors do not have any shareholding in the Company.

Further, Directors are not relatives of each other and none of the employees

of the Company are relative of any of the Directors.

At the last AGM Twelve Thousand Six Hundred and Forty Seven (12,647)

members (including proxies) holding 31026116 number of equity shares

recorded presence during the meeting.

(iii) Changes in Directorship of the Company in FY 11-12

During the Financial Year 2011-2012, there are following changes in the

composition of Board of Directors of the Company:

Sr. No. Name of Director Joining/ Cessation Date of joining/Cessation

1 *Shri Akhilesh Mishra Joined 8thAugust, 2011

2 Shri V.M. Kaul Joined 17thOctober, 2011

3 Smt. Rita Acharya Joined 03rdJanuary, 2012

4 Shri Anil Razdan Joined 09th

January, 20125 Shri Dhirendra Swarup Joined 09thJanuary, 2012

6 Shri H.L. Bajaj Joined 09thJanuary, 2012

7 Shri Satish C Mehta Cease 18thJuly, 2011

8 Shri R.N. Nayak Cease 11thOctober, 2011

9 Shri Sudhir Kumar Cease 30thNovember, 2011

10 Shri D.P. Bagchi Cease 28thSeptember, 2011

11 Shri P. Abraham Cease 28thSeptember, 2011

12 Shri V.M. Kaul Cease 31stMarch, 2012

* Shri Akhilesh Mishra ceased to be Director w.e.f 19th July, 2012.

The Board places on record its deep appreciation for the valuable contribution

made by S/Shri Sudhir Kumar, Satish C. Mehta, R.N. Nayak, D.P. Bagchi,

P. Abraham, and V.M. Kaul members of the Board, who cease to be Directors

of the Company in FY 2011-12.

Further, Shri Ravi P. Singh (Nominee Director of PowerGrid Corporation of

India Limited) has joined w.e.f. from 3rd April, 2012.

(D) Board Procedure

(i) Decision making process

The Board of Directors acts as trustees of stakeholders and is responsible

for the overall functioning of the Company. With a view to professionalize

all corporate affairs and setting up systems and procedures for advance

planning of matters requiring discussion/decisions by the Board, the

Company has defined appropriate guidelines for the meetings of the Board

of Directors. These Guidelines facilitate the decision making process at the

meetings of Board, in well informed and proficient manner.

(ii) Scheduling and selection of Agenda items for Board /Committee

Meetings

(a) The meetings are being convened by giving appropriate notice after

obtaining the approval of the Chairman of the Board/Committee. To

address urgent needs, meetings are also being called at short notice.The Board is also authorized to pass Resolution by Circulation in case

of business exigencies or urgency of matters.

(b) Detailed agenda, management reports and other explanatory statements

are circulated in advance amongst the members for facilitating

meaningful, informed and focused decisions at the meetings. The

Company Secretary while preparing the Agenda ensures that all the

applicable provisions of law, rules, guidelines etc. are adhered to. The

Company ensures compliance of all the applicable provisions of the

Companies Act, 1956, SEBI Guidelines, Listing Agreement, and various

other statutory requirements.

(c) All the department heads are notified of the Board meeting in advance

and are requested to provide the details about the matters concerning

their department requiring discussion/approval/ decision at the Board

meetings. Based on the information received, the agenda papers are

prepared and submitted to concerned department Heads for obtainingapproval of the Chairman. Duly approved agenda papers are circulated

amongst the Board members by the Company Secretary.

(d) Where it is not practicable to attach any document or the agenda due

to its confidential nature, the same is tabled before the meeting with

the approval of the Chairman. In special and exceptional circumstances,

additional or supplemental item(s) to the agenda are circulated.

Sensitive subject matters are discussed at the meeting without written

material being circulated.

(e) The meetings are usually held at the Companys Registered Office in

New Delhi.

(f) In addition to detailed agenda being already circulated, presentations

are also made at the Board/ Committee meetings covering Finance,

Operations & Sales, Human Resources, Marketing and major business

segments of the Company to facilitate efficient decision making.

(g) The members of the Board have complete access to all information of

the Company. The Board is also free to recommend inclusion of any

matter in agenda for discussion. Senior management officials are called

to provide additional inputs to the items being discussed by the Board,

as and when necessary.

(E) Recording minutes of proceedings at the Board Meeting

The minutes of the proceedings of each Board/Committee meeting are

recorded and are duly entered in the minutes book kept for the purpose. The

minutes of each Board/ Committee meeting are circulated among the Board/

Committee members in the next Board Meeting for their confirmation.

(F) Follow-up mechanism

The guidelines laid down for the Board and Committee Meetings ensures

that an effective post meeting follow-up & review has been done. The actionstaken on the decisions are reported to the Board/ Committee in the form of

Action Taken Report (ATR) tabled at the immediately succeeding meeting of

the Board/ Committee for noting by the Board/ Committee.

2. Committees of the Board of Directors

The Board has constituted many functional committees depending on the

business needs and legal requirements. The Committees constituted by the

Board on the date of the Report are as follows:

Audit Committee

Remuneration / Compensation ( ESoP) Committee

Investor Grievance Committee


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Nomination Committee

Ethics And Compliance Committee

Group of Directors for Business Development

2.1 Audit Committee

a) Composition

Pursuant to the provisions of Section 292A of the Companies Act, 1956 and

the provisions of Clause 49 of the listing Agreement, Audit Committee has

been constituted by the Board of Directors.

The Audit Committee presently comprises of the following Non-Executive and Independent Directors:

Sr. No. Name of the Director

1 Shri S. Balachandran

2 Shri Hemant Bhargava

3 Shri Ved Jain

4 Shri Dipak Chatterjee

5 Shri Dhirendra Swarup

The Company Secretary acted as the Secretary of the Committee.

b) Terms of Reference

The broad terms of reference of Audit Committee are as follows:

a. Oversight of the Companys financial reporting process and the

disclosure of financial information to ensure that the financial statement

is correct, sufficient and credible;

b. Recommending to the Board, the appointment, re-appointment or

removal of the statutory auditor and the fixation of audit fees.

c. Reviewing with management the periodical financial statements before

submission to the Board for approval, with particular reference to (i)

changes in accounting policies and practices, (ii) major accounting entries

involving estimates based on exercise of judgment by management, (iii)

qualifications in draft audit report (if any), (iv) significant adjustments

made in financial statements arising out of the audit, (v) the going

concern assumption, (vi) compliance with accounting standards, (vii)

compliance with listing and other legal requirements concerning

financial statements, (viii) Disclosures of any related party transactions

i.e. transactions of the Company of material nature, with promoters

or the management, their subsidiaries or relatives etc that may have

potential conflict with the interest of the company at large;

d. Reviewing with the management performance of statutory and internal

auditors, the adequacy of internal control systems and recommending

improvements to the management;

e. Reviewing the adequacy of internal audit functions;

f. Discussion with internal auditors any significant findings and follow-

up thereon;

g. Reviewing the findings of any internal investigations by the internal

auditors into the matters where there is suspected irregularity or a

failure of internal control systems of a material nature and reporting thematter to the Board.

h. Discussion with statutory auditors before the audit commences, about

the nature and scope of audit as well as post-audit discussion to

ascertain any area of concern.

i. Approval of appointment of CFO (i.e., the whole-time Finance Director

or any other person heading the finance function or discharging that

function) after assessing the qualifications, experience & background,

etc. of the candidate.

j. Any other work as may be assigned by the Board of Director(s) of the

Company from time to time.

The terms of reference stipulated by the Board to the Audit Committee are as

per Clause 49 of the Listing Agreement and Section 292A of the Companies

Act, 1956. The Audit Committee had reviewed the Annual Financial

Statements, before their submission to the Board, as prescribed in Section

292A of the Companies Act 1956. The CFO, Internal auditors and Statutory

auditors of the Company are permanent invitees at the meetings of Audit

Committee.The minutes of the Committee were placed before the Board ofDirectors for information. PTC has not denied any personnel access to the

Audit Committee of the company in respect of any matter. There was no case

of alleged misconduct.

c) Number of Committee Meetings and Attendance

The Committee met four (4) times in the FY 2011-2012. Meetings of the

Committee were held on 6th May, 2011, 8th August, 2011, 9th November

2011, 30th January, 2012.

Sr. No. Name of Director Audit CommitteeMeetings

No. ofMeeting held

during theyear

Held duringthe Tenure

Attended

1 Shri S.Balachandran 4 4 4

2 Shri Hemant Bhargava 4 4 43 Shri Ved Jain 4 4 4

4 Shri Dipak Chatterjee 2 2 4

5 Shri D. Swarup - - 4

6 Shri D.P. Bagchi 2 2 4

Note:-

Shri D.P. Bagchi, Director has ceased to be member of Audit committee

consequent to his cessation to be Director w.e.f. 28th September, 2011.

Shri D.P. Bagchi, then Chairman of the Committee was present at the last

AGM of the Company.

Shri Dipak Chatterjeeand Shri D. Swarup has joined the committee w.e.f.

9th November, 2011 and 22nd April, 2012 respectively.2.2 Remuneration/Compensation ( ESoP) Committee

a) Terms of Reference

The Remuneration Committee of the Company reviews, approves and

recommends to the Board the matters connected with fixation and periodic

revision of remuneration of Chairman & Managing Director and Whole

time Directors, as also such other work relating to remuneration as may be

assigned by the Board of Director (s) of the Company from time to time. The

Compensation Committee looks after the work relating to ESoP as per the

SEBI guidelines.

b) Composition and meetings

Presently this Committee comprise of following Directors:

Sr. No. Name of Director

1 Shri S. Balachandran2 Shri A.B. L. Srivastava

3 Smt. Rita Acharya

4 Shri Dipak Chatterjee

5 Shri H.L. Bajaj

Shri Rajiv Maheshwari, Company Secretary act as the Secretary to the

Committee. The Committee is Chaired by Independent Director. The

Committee has its meeting as per the requirement.

(c) Detail of Remuneration to Executive Directors of the Company

during FY 2011-2012


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The remuneration paid to the Whole-time Directors during the year 2011-

2012 is as under:

Sr. no. Director Designation Remuneration (figures inRs. million)- FY 11-12

1. Shri T.N. Thakur CMD 11.882. Shri Deepak Amitabh Director 6.23

CMD and Whole-time Directors have surrendered their Stock options of

PTC and PFS.The entire CTC of CMD and WTDs is fixed component. Notice

period of CMD and WTDs is 3 months.

d) Detail of payment made towards sitting fee to the Non- Executive

Directors for Board/ Committee Meeting during the year 2011-2012 is

as under:

Sr. no. Name of the Director Designation Remuneration (figuresinRs. million)- FY 11-12

1 Shri I.J. Kapoor* Non- Executive 0.16

2 Shri M.K. Goel* Non- Executive 0.08

3 Shri A.B.L. Srivastava* Non- Executive 0.14

4 Shri S. Balachandran Non- Executive 0.24

5 Shri Hemant Bhargava* Non- Executive 0.18

6 Shri Ved